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Pro: Tesla's Success Is Riding On This

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Options expert Nic Chahine recently told Benzinga he was impressed that Tesla Motors Inc (NASDAQ: TSLA) held support amid a market sell-off last week. He did, however, voice concerns on issues regarding factory placement and implementation.

Tesla Held Amid Falling Oil

Chahine, in particular, dove into the relationship between oil and Tesla: “In theory cheaper oil should be bad news for Tesla.” The fact that Tesla shares held, he said, implies the market believes the company offers more than an alternative to gasoline-powered automobiles.

Related Link: Proof Apple Is Working On A Tesla-Killer?

There is excitement around the company's innovations, Chahine added.

Tesla’s Factory Situation Is A Concern

The expert notes that CEO Elon Musk chose Reno, Nevada as the location for Tesla’s lithium ion battery factory based on battery pack-completion time, rather than cost efficiency.

He warned: “If there is a problem with the factory, that could jeopardize the future of Tesla...because so much is riding on it.”

A Trading Idea

Chahine concluded with a trading idea: “Take a debit spread and guess the direction. Tesla looks like it is at a decent support and may be looking at a pop in the near future. However I haven't quite decided that yet.”

Tesla will report fourth quarter earnings after the markets close on Wednesday.

The full interview is below.

Latest Ratings for TSLA

DateFirmActionFromTo
Jan 2017Morgan StanleyUpgradesEqual-WeightOverweight
Jan 2017GuggenheimInitiates Coverage OnBuy
Oct 2016Goldman SachsMaintainsNeutral

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

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